Shipping Industry Opposes Fair Trade Commission's Heavy Fines, Citing "Weakened Competitiveness"

The Busan Port Sinsundae Pier, piled high with import and export cargo, brightly illuminates the night sky to continue nighttime operations. South Korea surpassed $640 billion in annual export value in 2021, setting a new record high. Since recording its first $100 million in 1964, it exceeded $10 billion in 1977, $100 billion in 1995, $600 billion in 2018, and this year surpassed $640 billion, marking a new milestone in 66 years of trade history.
Busan ? Photo by Kang Jin-hyung aymsdream@

[Asia Economy Reporter Yoo Hyun-seok] The domestic shipping industry is protesting the Fair Trade Commission's sanctions on the "Korea-Japan and Korea-China route domestic and international container liner shipping freight rate collusion." The industry fears that this decision will deteriorate the competitiveness of Korean shipping.

According to the industry on the 11th, the Fair Trade Commission imposed a fine of 80 billion won on 15 domestic and international shipping companies for violating procedures such as failing to report ex post to the Minister of Oceans and Fisheries and raising freight rates 76 times on the Korea-Japan route from February 2003 to May 2019.

The 14 domestic shipping companies and 1 foreign shipping company that colluded on freight rates on the Korea-Japan route are ▲Heung-A Line ▲Korea Marine Transport ▲Janggeum Shipping ▲Nam Sung Shipping ▲Dongjin Shipping ▲Cheonggyeong Shipping ▲Dongyoung Shipping ▲Beomju Shipping ▲Panstar Line.com ▲Pan Ocean ▲Taeyang Shipping ▲SITC Container Lines (China) ▲SM Line ▲HMM.

The Fair Trade Commission also issued corrective orders for collusion allegations on the Korea-China route. The reason was that 27 domestic and international shipping companies colluded and raised freight rates 68 times over 17 years on the Korea-China route. The 16 domestic shipping companies that colluded on freight rates on the Korea-China route are ▲Korea Marine Transport ▲Nam Sung Shipping ▲Dongyoung Shipping ▲Dongjin Shipping ▲Doowoo Shipping ▲Beomju Shipping ▲SM Line ▲HMM ▲Janggeum Shipping ▲Cheonggyeong Shipping ▲Taeyang Shipping ▲Pan Ocean ▲Han Sung Line ▲Heung-A Line ▲Heung-A Shipping ▲Jincheok International Cargo Shipping.

The Korea Shipping Association called the measure unfair and demanded its immediate withdrawal. In a statement, the Shipping Association said, "Only Korea's Fair Trade Commission has imposed unprecedented sanctions, which will ultimately harm only the Korean network in the international logistics supply chain," and "This is a unilateral sanction against international customs and laws." It added, "This Fair Trade Commission decision raises concerns about the collapse of Korea's shipping industry and the avoidance of domestic ports by large foreign shipping companies," and "It is expected to cause an increase in export-import cargo sea transportation costs and disrupt timely transportation for shippers."

The shipping industry also criticized the Fair Trade Commission's decision as "killing one's own family." An industry official explained, "The government has long managed ship deployment volumes through shipping agreements (treaties) and shipping consultations based on those agreements," and "But if they impose fines and issue prohibitions like this, it will only be killing their own family."

In particular, the industry is concerned that this decision could lead to a deterioration in the competitiveness of the shipping industry. Another shipping industry official said, "Shipping companies are currently exploring various ways to maintain competitiveness on the international stage," and "This Fair Trade Commission decision could rather strangle the shipping industry."

This content was produced with the assistance of AI translation services.